Analysts say chancellor has wriggle room for limited package of measures in Wednesday’s mini-budget, as US Fed chair signals more aggressive rate rises to tame inflation

Bethany Beckett, UK economist at Capital Economics, has looked at what the chancellor might do tomorrow.

Notwithstanding the deterioration in the public finances in February, large revisions to the back data mean that borrowing in 2021/22 is on track to undershoot the OBR’s October 2021 forecast by a huge £23bn.

Even so, we suspect the sharper rise in debt interest costs in February than many expected may embolden the chancellor to keep a fairly tight grip on the public finances in tomorrow’s spring statement.

• Stock markets rally on China stimulus and Ukraine peace hopes
• Rouble edges higher ahead of Russian bond payments
• Introduction
• Ukraine live updates

The UK government released $530m of its debts to Iran, ahead of Tehran’s release of two British-Iranian prisoners, Iran’s semi-official Fars news agency reported.

The prisoners are Nazanin Zaghari-Ratcliffe, who had been detained by Iran for six years, and Anousheh Ashouri.

• ECB raises inflation forecasts, cuts growth outlook due to Ukraine war
• UK sanctions Chelsea FC owner Roman Abramovich and Rosneft boss Igor Sechin; Chelsea sale halted
• European stock markets fall ahead of ECB rate decision, oil prices rise
• UK fuel prices hit fresh record highs; a tank of petrol costs nearly £88
• CBI urges UK government support amid ‘looming crisis’ in energy bills
• Sony, Nintendo, Hitachi join corporate exodus from Russia
• Closing summary

Rishi Sunak is also facing intense pressure from Conservative colleagues to take action in this month’s spring statement to alleviate the cost of living crisis, which has been dramatically exacerbated by the Russian invasion of Ukraine, write our political editor Heather Stewart and political correspondent Peter Walker.

Asked about the impact of sanctions on Russia for consumers at home, the business secretary, Kwasi Kwarteng, told MPs on Wednesday he believed the public was “willing to endure hardships” in solidarity with the people of Ukraine.

The crisis is likely to have a negative impact on investment intentions of UK firms following Brexit and Covid. This is the worst timing possible, as business investment intentions were high coming into 2022. So the Government must move now to stimulate business investment to maintain UK growth, thereby demonstrating true independence from Russia.

• Global shares tumble as commodity prices soar, on track for biggest weekly gains in years
• IEA head says he is ‘deeply concerned’ about the situation at Europe’s biggest nuclear power station
• Ukraine crisis live updates

As reported earlier, Russian elites could have their property seized and handed over to Ukrainian refugees, Britain’s deputy prime minister has suggested.

Dominic Raab made the remarks as he defended the UK’s response to Moscow’s invasion of Ukraine and the prime minister, Boris Johnson, called for an emergency UN summit after a Russian attack on a nuclear power station in Ukraine.

• European shares drift lower as Moscow stock exchange stays closed for fourth day
• IoD: no longer tenable for Brits to sit on boards of Russian firms
• France seizes yacht linked to Rosneft boss Igor Sechin
• Severstal directors resign a day after Mordashov quits Tui board and shifts Nordgold stake to his wife
• Russian airlines shut out of UK insurance market
• Introduction: Oil prices at nine-year peak
• Ukraine live updates

The drinks giant Diageo, which makes Smirnoff vodka and Guinness, has paused exports to Russia and Ukraine. A spokesperson told Reuters:

Our priority is the safety of our people in Ukraine and the wider region.

The Institute of Directors expresses its solidarity with Ukraine and its people, who are facing intolerable suffering.

Although directors owe legal duties to the companies on whose boards they serve, they should also feel a stronger moral duty to uphold the fundamental values of freedom and democracy. We believe that it is no longer tenable for British directors to be involved in governance roles in the Russian economy. Therefore, we hope that they will now question the viability of their mandates in Russian and Belarusian companies.